Bank halts issue of new fivers

Sunday 26 May 2002 23:00 BST

THE Bank of England has halted the distribution of the £5 notes after discovering serial numbers on the currency could be rubbed off. Around £50m of the notes have been released since their launch last Tuesday. But the Bank said the note's anti-counterfeiting features were intact.

Urgent tests had shown both serial numbers on some of the notes could be rubbed off. The Bank has now asked banks and Post Office to hold on to the new notes while it probes further.

Around 10m of the new notes had been distributed but it believed a 'substantial proportion' were still in bank or Post Office branches and had not been issued to the general public. There were still around 200m of the old £5 notes in circulation, which should be enough to meet demand.

It said the serial numbers were there to identify notes as unique items and to allow the Bank to trace their origin. 'The absence of all or part of a serial number does not affect the value or authenticity of a note. But if members of the public are concerned they should take them to a bank where they can be exchanged,' the Bank said.

The Bank launched its investigation earlier today after receiving 'half a dozen' calls from members of the public. But at that time it was still releasing the notes. A spokesman said: 'We did undertake extensive tests before the notes were launched and had no reason to believe there would be any problems.'

The notes, featuring a portrait of social reformer Elizabeth Fry, were made at the Bank's printing works in Debden, Essex. On their launch, Merlyn Lowther, the Bank's chief cashier, whose signature appears on the notes, said: 'This is the most secure £5 note we have produced.'

The blunder could blight the Bank's attempts to find more customers for Debden. Reports earlier this year suggested the Bank was considering selling the operation to a private bidder, a prospect that has worried unions who fear job losses.

Debden hit the headlines in August 1999 when a lorry loaded with £450m in new £20 notes broke down on the M11. Police threw a ring of steel around the 40-ton vehicle. The lorry was protected by police armed with semi-automatic machine guns, handguns and smoke grenades.